What should not be confused with Strategy
1. Action is not strategy. It is most common to confuse action with strategy. Managers often have many alternative answers to the question, “How should we grow?” For example: entering new markets, increasing sales calls, launching new products, etc. Strategists ask three questions: where, how, and what.
"Where" refers to the destination, also It is the ultimate result that the enterprise wants to achieve. "How" refers to the category of strategy. It does not tell you what you should do, but only suggests the direction and how to achieve the goal. "What" refers to the actions that must be taken to use the established strategy to achieve the established goal. It is a tactic, not a strategy.
2. Scale is not a strategy. When asked how to achieve the set goals, some people gave the answer by adding more manpower, authorizing more dealers, opening more outlets, expanding production, or simply working harder. But scaling up is not a strategy. Just like casting the net wider or using a bigger net when fishing, it is useless if the fish are somewhere else.
3. High quality, low costand excellent customer service are not strategies. Within a product category, there is an acceptable standard of quality at every price point. Customers will present inferior quality products among several competing products at the same price. By improving quality over rivals, a company can create a competitive advantage. But it doesn’t take long for competitors to catch up or even surpass them. Quality is a moving target and you must continually improve to retain customers. This is why quality is not a strategy.
Customer service is not a strategy either. A company can gain a temporary advantage by providing its customers with services that are not available to its competitors. But this advantage is unlikely to last, and rivals are likely to catch up.
4. Harming competitors is not a strategy. Believes that low-priced products will undercut competitors and boost their own business growth. The mistake in this idea is to focus the strategy on the competition rather than the customer. A company's strategy must help the company prepare for the future to ensure its long-term health. For market leaders, especially companies that occupy a major share of the market, the strategy they can adopt may be to plan to increase usage and create new niches in a growing market. Significant growth opportunities can exist when new and compelling value is created for customers. And when a company focuses on hurting its rivals, it won't create an uncontested market.
5. The annual operating plan is not a strategy. Most companies spend a lot of time preparing what's called an annual operating plan, which is called a strategic plan, but there's usually no strategy in it. Strategy is the product of in-depth insights, and the annual plan is an action plan. Strategy is a broad direction that allows for experimentation, adaptation, and learning from experience. The annual plan is implemented based on established plans, reasons for past successes or lessons learned from failures, etc. There is no doubt that annual planning is very important, but if you think of it as a strategy, it is of little use.
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